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UgoWork raises $22.8M for AI-powered batteries

IMAGE: UgoWork lithium-ion battery equipped forklifts
UgoWork lithium-ion battery equipped forklifts. (Courtesy UgoWork)

UgoWork, a manufacturer of lithium-ion battery solutions for forklifts, recently closed a round of funding to scale up its AI-based energy-as-a-service platform used for its batteries, as well as grow sales and expand its distribution footprint.

UgoWork began in 2015 as “four guys in a lab,” according to marketing director JF Marchand. “The real kickstart was in 2018 when there was a commercial product going to market.”

The company was created in response to difficulties around using lead acid batteries in forklifts, including a short battery life, extra maintenance and inefficient energy transfer.

“They would work two or three shifts a day and in order to do that with the lead acid batteries, they would have to swap the batteries,” he explained. “It's a very heavy block of acid that you have to remove from the forklift and put another one that is fully charged so that you can keep moving with the truck. All of that put together brought the founders into developing a lithium-ion battery that tackles a lot of those issues.”

The funding

UgoWork raised $22.8 million in an all-equity Series B financing led by Fonds de solidarité FTQ. Export Development Canada and existing UgoWork investors Desjardins Capital and Investissement Québec also participated.

UgoWork had a Series A funding round in 2018 and in May this year received a $2 million loan from Investissement Québec to be put toward its North American market expansion.

The Quebec City-based company currently produces three batteries for different classes of forklift: 24V for Class 2 and 3, 36V for Class 1 and 2 as well as a 48V model for Class 1.

UgoWork’s lithium-ion batteries

All of the batteries are built using the same technologies. However, since the battery in a forklift acts as a counterweight, UgoWork’s models come in different weights to accommodate the varying forklifts.

According to Marchand, lithium-ion batteries can be four to five times more expensive than their lead acid counterparts. So the company’s energy-as-a-service solution offers both battery maintenance, guaranteed power and fleet optimization for a monthly fee.

“The batteries communicate with our cloud. We have a team that actually gets informed when something is out of the normal trends for an application,” he said. “This infrastructure is to proactively intervene and make proactive maintenance or even anticipate failures.”

In fleet optimization, UgoWork’s customer success managers can share KPIs and other performance indicators through the batteries to help customers achieve monthly goals for carbon dioxide emissions reductions. Depending on the electricity provider, peak shaving can also occur.

Currently, UgoWork’s production facility produces 1,000 batteries per year, but Marchand said the number “is changing every week.” The Series B funding will also play a role in expanding that production.

“Lithium is not eternal, it's better in terms of performance compared to lead acid but the performance will go down as the time goes, because it's a physical asset,” he said. “In the energy-as-a-service program, we will replace the lithium when the performance level is decreased to a level where it cannot sustain the application.”

While UgoWork is looking at the evolution of lithium supply in Canada, it’s not there yet. Its lithium is supplied by a partner in Asia, “one of the main players.” UgoWork also has an agreement with Lithion Recycling in Montreal to recycle its forklift batteries at Lithion’s demonstration plant.

Future plans

Marchand broke down the market into two types of companies. “Giants” from the lead acid world who either bought a smaller lithium-ion company or developed their own platform, and the “smaller guys” like UgoWork who started with lithium from the beginning.

“The big ones probably have the financial advantage, but they don't move as fast in terms of innovation,” he explained. “The smaller ones have to innovate, to create differentiators. So that's what we're trying to do with our energy-as-a-service software platform that we're gonna develop further.”

There are research and development projects in the works that Marchand did not disclose, although the funding will also go toward new hires. Currently the company consists of 56 employees.

There are plans to more than double that number in the upcoming 12 to 18 months with positions in engineering, automation, software, production and sales.

In the long-term, Marchand said UgoWork could diversify to include lithium-ion batteries in other sectors, mentioning competitors developing similar batteries for airport luggage carts. However, the greatest need at the moment is in material handling for Canada and the U.S.

“There are more than 10 million forklift trucks in the world, and approximately 30 per cent of them are in North America,” he said. “So that's a very large market, were just chipping at the beginning of it.”

There are also plans to include the traceability of the lithium from its original mine to a battery cell into its software platform as that becomes regulated around the world – Marchand stated it is already enforced in Europe.

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